Ant Group said its founder Jack Ma will give up control of the Chinese financial technology giant in a move to revive its $37 billion IPO that was cancelled the last minute in 2020, Reuters news report said.
Ant’s $37 billion IPO would have been the world’s largest.
After the Adjustment
– Major shareholders including Hangzhou Junhan and Hangzhou Junao will independently exercise their voting rights
– No shareholder will, alone or jointly with another shareholder, have the power to control the outcome of Ant Group’s general meetings
– No shareholder will have the power to nominate the majority of Ant Group’s board of directors
– Shareholding structure of Ant Group will be more transparent and diversified
– Will not affect the day-to-day operations of Ant
Analysts said a relinquishing of control could clear the way for the company to revive its IPO, the change, however, is likely to result in a further delay due to listing regulations.
China’s domestic A-share market requires companies to wait three years after a change in control to list. The wait is two years on Shanghai’s Nasdaq-style STAR market, and one year in Hong Kong.
Ma owns 10 percent equity stake in Ant, an affiliate of e-commerce giant Alibaba Group Holding. Ma has exercised control over the company through related entities, according to Ant’s IPO prospectus filed with the exchanges in 2020.
Hangzhou Yunbo, an investment vehicle for Ma, had control over two other entities that own a combined 50.5 percent stake of Ant, the prospectus showed.
Ant said that Ma and nine of its other major shareholders had agreed to no longer act in concert when exercising their voting rights, and would only vote independently. The shareholders’ economic interests in Ant will not change as a result of the adjustments, Ant said.
Ma previously possessed more than 50 percent of voting rights at Ant but the changes will mean that his share falls to 6.2 percent, according to Reuters calculations.
Ant also said it would add a fifth independent director to its board so that independent directors will comprise a majority of the company’s board. It currently has eight board directors.
“As a result, there will no longer be a situation where a direct or indirect shareholder will have sole or joint control over Ant Group,” it said in its statement.
Ant’s market listing in Hong Kong and Shanghai was derailed days after Ma publicly criticised regulators in a speech in October 2020. Since then, his sprawling empire has been under regulatory scrutiny and going through a restructuring.
Ant operates China’s ubiquitous mobile payment app Alipay, the world’s largest, which has more than 1 billion users.
Ant said on Saturday that its management would no longer serve in the Alibaba Partnership a body that can nominate the majority of the e-commerce giant’s board, affirming a change that started mid-last year.